Asset Management

What Are Thermal Energy Networks for Gas Utilities?

What thermal energy networks are, how they differ from gas and district energy, which pilots exist, and what a new service means for utility billing records.
What Are Thermal Energy Networks for Gas Utilities?

For US Utilities serving 3,000-100,000 meters and for operations team, billing team and utility managers. For Heads of Billing who own collections accuracy and revenue leakage.

Key Takeaways
  • A thermal energy network is a shared water loop that lets many buildings heat and cool with heat pumps.
  • DOE treats networked geothermal and thermal energy networks as the same idea.
  • New York's 2022 law has the seven largest utilities propose pilots.
  • A new service adds accounts, assets, work orders, and a rate class.
  • SMART360 holds those records; it does not engineer networks.

A thermal energy network (TEN) is a shared underground loop of water-filled pipe that connects many buildings to heat pumps, so the group can heat and cool itself using the ground, water, or waste heat instead of burning gas in each building. The U.S. Department of Energy uses "networked geothermal" and "thermal energy network" for the same idea. For a gas utility, a TEN is a possible new service: the utility builds and operates the pipe, and customers pay for heating and cooling.

What Is a Thermal Energy Network?

A thermal energy network moves heat between buildings through a loop of piping, rather than making heat in each building with a furnace or boiler. The U.S. Department of Energy describes networked geothermal, also called thermal energy networks, as shared underground infrastructure that heats and cools many buildings at once, from neighborhoods and campuses to whole communities (U.S. DOE).

Each building connects to the loop and uses a heat pump to take heat out of the water in winter and put heat into it in summer. Because buildings need heating and cooling at different times, the shared loop lets one building's waste heat serve another.

The pipe runs at about the depth of a typical natural gas system, according to DOE. That detail is why gas utilities pay attention: the skills, rights-of-way, and customer relationships are similar to the ones they already have.

This page explains what a TEN is, how it works, why gas utilities are piloting them, and what a new service like this changes for a utility's customer, asset, and billing records. If your utility already runs a gas utility management platform, those records are where the change shows up first.

How a Thermal Energy Network Works

The basic design has four parts:

  • A shared loop. Water circulates through piping that connects buildings. In winter, warm water goes to buildings and cooled water returns to be reheated; the process reverses in summer (U.S. DOE).
  • Heat pumps and heat exchangers in each building. These move thermal energy into and out of the loop. They run on electricity.
  • A heat source and sink. DOE lists bodies of water, waste heat from connected buildings, wastewater, and the stable temperature of the earth. Some systems add shallow boreholes for storage, backup boilers, or solar panels.
  • Customer connections. Each connected building has a service line to the loop and equipment on the premises.

Design varies. Systems can be standalone or paired with other energy systems, use ground-source heat pumps or direct geothermal heat, and provide heating and cooling or heating only.

Utility Dive describes TENs as a new generation of district heating and cooling networks that draw heat from the ground, surface water, or waste heat, and use electricity to move it (Utility Dive). Older district energy systems carry steam or hot water from a central plant that often burns fossil fuels or biomass.

Thermal Energy Networks vs Gas Distribution vs District Energy

A TEN is easy to confuse with two systems it resembles. The differences matter for planning and for what a regulator will ask. The methane records a gas utility keeps for its pipe, covered in our guide to methane emissions reporting for gas utilities, have no counterpart on a water loop, which is one reason utilities look at networks.

FeatureGas distributionTraditional district energyThermal energy network
What moves through the pipeNatural gasSteam or hot water from a central plantWater near ground temperature
Where heat is madeIn each building (furnace, boiler)At a central plantIn each building by a heat pump, using the loop
Energy inputGasOften fossil fuel or biomassElectricity to run the heat pumps
CoolingSeparate systemSometimesSame loop and equipment
Typical operatorGas utilityDistrict energy company or campusUtility, municipality, campus, or housing owner
Leak consequenceMethane release and safety riskHeat lossWater loss

DOE gives several operating examples. Boise runs a municipally operated heating utility with more than 20 miles of pipeline. Framingham, Massachusetts, has a utility-owned system. Ball State University serves 47 buildings from about 3,600 boreholes (U.S. DOE). The ownership model is not fixed, which is part of why regulators and utilities are still working out how these services fit.

Why Gas Utilities Are Piloting Them

Gas utilities face a long-term question: how to serve customers if gas use falls in the buildings they serve. Several pressures point the same way, and our overview of city gas distribution trends covers the wider market shifts behind them.

  • Aging pipe and replacement cost. Replacing old gas mains is expensive, and a network could serve some neighborhoods with a different service instead.
  • State policy. Some states have directed utilities to propose pilots, described below.
  • Skills and assets already in place. Utility Dive reports that Eversource's gas operations president said building and maintaining an underground geothermal network has many parallels to work the utility's employees already do (Utility Dive).
  • Customer retention. The same article notes that Eversource's gas sales team in Framingham signed up customers quickly and was renamed "customer thermal solutions."
  • Cost to customers. A 2021 study for the nonprofit Heet estimated that an average Massachusetts home using networked geothermal would spend $420 to $620 a year on heating, against $1,040 to $1,120 for a gas furnace, as reported by Utility Dive. That is an estimate from one study, not a guarantee for any utility.

Not every gas utility will build a network, and many will not. But the question is on regulators' agendas, so utility leaders need to know the model.

Pilots and Programs

Most activity in the United States is in pilots. The best-documented programs are:

  • Utility Thermal Energy Network and Jobs Act (New York). In law since July 2022, it requires the state's seven largest investor-owned utilities to each submit at least one proposed thermal network pilot. Fourteen pilot proposals totaling up to $435 million were submitted, and the Public Service Commission called them a good first step but without enough detail for full approval. It set a staged review with revised filings, engineering design, a customer protection plan, and later decisions on whether each pilot is in the public interest (APPA Public Power).
  • Framingham, Massachusetts. A utility-owned networked geothermal system operating since June 2024, described as the first of its kind in the U.S. (Utility Dive).
  • DOE District-Scale Geothermal Energy Pilots. DOE selected 11 community coalitions in 10 states for planning and chose three to install networks: Framingham, a retrofit of 1950s buildings in Ann Arbor, Michigan, and buildings on Tribal lands in Oklahoma (U.S. DOE).

The New York process was still moving when this page was written. Check the Public Service Commission's case record for the current stage of each pilot before relying on any date.

How a Utility Thermal Energy Network Gets Built, Step by Step

Pilot designs differ, but a utility-owned network generally follows this sequence.

  1. Pick a neighborhood. Choose an area by building mix, existing pipe condition, and customer interest, often prioritizing disadvantaged communities where a program requires it.
  2. Survey the buildings. Record each building's heating and cooling loads, existing equipment, and the work needed to connect it.
  3. Design the loop and heat source. Size the piping, boreholes or other sources, and the central equipment.
  4. File with the regulator. Submit the project plan, costs, and a customer protection plan for review.
  5. Construct the network. Trench and install piping, build the source field, and set up the shared equipment. Work orders, crews, and permits run much like gas main work, and a structured gas pipeline work order system tracks each step.
  6. Connect customers. Install heat pumps and service connections, activate each customer, and begin service.
  7. Operate and bill. Monitor the loop, maintain equipment, read or estimate usage, and bill customers under the approved rate.

Steps six and seven are where the utility's customer and billing systems matter most, and they are the steps that existing records have to support.

What a New Service Changes for the Utility

A thermal network adds a service the utility has not billed before. It is a new product, with its own customers, equipment, and charges, even when the utility is the same company. The change touches several records.

AreaWhat changesWhy it matters
Customer accountsA premise may have gas, a thermal service, or both during a transitionAccounts need to support more than one service per location
Service points and metersNew connection type, possibly a different measurement basisMeter and service records must describe more than a gas meter
AssetsLoop piping, heat pumps, boreholes, pumps, and controlsThe asset register needs equipment types the utility has not tracked
RatesA new rate class, possibly a fixed monthly charge, usage charge, or bothRate design is set with the regulator and has to be configured and changed over time
Work ordersInstallation, maintenance, and repair of customer-side equipmentCrews need job types for work they have not done before
ReportingPilot reporting to the regulator and fundersCosts, connections, and performance must be traceable

Before the first customer connects, a utility can check its readiness with a few questions:

Can your customer system hold two services at one location, such as gas and a thermal service, and bill each under its own rate?

Can your asset register track equipment that sits on the customer's side of the connection?

Can your billing system add a new rate class without a vendor change request?

If the answer to any of these is no, the first project is the system, not the pilot. Asset records are the foundation; our guide to gas utility asset management software explains what a gas asset register should hold and how it supports replacement planning.

Where SMART360 Fits

SMART360 is a utility management platform for utilities serving roughly 3,000 to 100,000 connections. It is not thermal network engineering, design, or control software, and it does not run heat pumps or loop operations. What it provides is the customer, asset, work order, and billing record system that a new service has to plug into:

  • Customer accounts and service points, linked to the meters and assets that serve them.
  • Asset records for pipe and equipment, tracked across their full life.
  • Work orders with crew assignments and completion details.
  • Meter reads, validated before they reach a bill.
  • Billing with rates that an administrator can configure.
Utility needWhat the utility must doSMART360 role
New rate classDefine charges for a new serviceRates are set up and changed by an administrator
Customer onboardingActivate customers on a new serviceAccounts, service points, and portal records
Equipment trackingRecord loop and customer-side equipmentAsset register and linked work orders
Field workSchedule and close out installs and repairsWork orders from creation to completion
Data sharingPass records to design, GIS, or monitoring tools25+ pre-built integrations and APIs

Frequently Asked Questions

What is a thermal energy network?

A thermal energy network is a shared underground loop of water-filled pipe that connects many buildings to heat pumps, so the group can heat and cool using the ground, water, or waste heat. The U.S. Department of Energy uses "networked geothermal" and "thermal energy network" for the same thing.

How is a thermal energy network different from district energy?

Traditional district energy carries steam or hot water from a central plant that often burns fossil fuel or biomass. A thermal energy network circulates water near ground temperature, and each building uses an electric heat pump to take heat from or put heat into it.

Why are gas utilities involved in thermal energy networks?

Gas utilities have rights-of-way, pipe-laying skills, and customer relationships that a network needs. Some states, including New York under its Utility Thermal Energy Network and Jobs Act, require large utilities to propose pilots.

What is the Utility Thermal Energy Network and Jobs Act?

It is a New York law, in force since July 2022, that requires the state's seven largest investor-owned utilities to each propose at least one thermal energy network pilot. The Public Service Commission reviews proposals in stages.

Does SMART360 design or operate thermal energy networks?

No. SMART360 does not provide network engineering or control. It holds the customer accounts, service points, asset records, work orders, and configurable rates that a utility needs to bill and serve a new service.

See SMART360 in Action

A new service is a records and billing change as much as a construction project. SMART360 keeps customer accounts, service points, asset records, work orders, and configurable rates on one database, so a utility can add a service without rebuilding its systems.

See SMART360 in action

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